Under Armour, Inc. (UAA) was reviewed from a technical perspective at the end of October, and we summed up our thinking this way: "Prices are likely to open with a gap to the downside today. This could become an exhaustion gap if the volume is heavy and prices stabilize in the days ahead, but we will have to take it one day at a time."
Looking back over the past two months we can see prices have rallied to fill the late October gap and that we are now above the flattening 50-day moving average line. UAA is still below the 200-day moving average line but the slope of the line is flattening and prices are only $2 or so below this indicator.
The On-Balance-Volume (OBV) made a low with prices in early November and it has slowly improved. A rising OBV line tells us that buyers of UAA have become more aggressive with heavier trading volume seen on days when the stock has closed higher. The Moving Average Convergence Divergence (MACD) oscillator crossed above the zero line last month for an outright go long signal.
In this weekly bar chart of UAA, below, we can see a long-term decline for this stock. Prices are sill below the 40-week moving average line but the slope of the line is beginning to flatten. The weekly OBV line has been in a decline since early 2016 but shows some improvement the past two months. The weekly MACD oscillator is showing a fresh cover shorts buy signal at the end of November.
In this Point and Figure chart of UAA, below, we can see steep mark down since early 2015. Prices touched $11.50 on this chart and you can see the heavier volume (left scale) in the $13.00-$11.50 area. A trade at $16.50 will be a small upside positive. Some sort of retest of the $11.50 low should be anticipated.
Bottom line: UAA may have made its low but it has more work to do to build a proper bottom. In this process the November low could be retested but it is not necessary. Sideways price action (also called backing and filling) in the $13-$18 area would be a positive sign. A strong close above $18 may be enough for aggressive traders to probe the long side.